What if it’s not drug companies or dodgy dealers trying to keep you hooked, but rehab? It sounds like a twist straight from a Philip K. Dick novel, but that’s what allegedly happened with a treatment center in Southern California.
Prosecutors accuse two local rehab kingpins, Nathan Young, 39, and his father David Young, 71, of running a devious scheme that involved luring recovering addicts with illegal drugs so they could keep milking insurance companies that were paying for their treatments. Many of these addicts were on the fringes of society, and often unhoused.
From 2020 to 2026, the father-son fraudsters submitted more than $1.6 billion in claims to health insurers, from which they reaped over $210 million, according to a criminal complaint reported by the Wall Street Journal.
Assistant attorney general Colin McDonald called it the “largest the largest sober home fraud scheme the [Justice] Department has ever prosecuted,” as quoted by the New York Post.
To keep a constant churn of patients, recruiters known as “body brokers” were allegedly paid to find people addicted to drugs in nearby states, spinning the a yarn about how they could recover at a scenic California rehab center. Once on board, the patients signed up with lucrative private insurance plans with high reimbursement rates, according to the WSJ reporting.
Prosecutors say that the Youngs offered addicts illegal kickbacks in the form of money, free flights and accommodations — and more drugs.
The addicts, meanwhile, were treated as expendable. Once they milked a patient’s insurance plan dry, according to the charges, the Youngs kicked them out without offering support, even if they hadn’t recovered. This grim practice is called “patient dumping” or “curbing.”
“When they couldn’t bill anymore, they’d end up on the streets of California and Los Angeles,” first assistant US attorney Bill Essayli told the NYPost.
Some patients were even coached to fake or exaggerate their substance addictions so they could string along insurers to extend and cover their stay, prosecutors said. Often, the care that was offered was a total sham, with patients logging in for Zoom “therapy” sessions where no one was expected to participate. Employees were also instructed to take patients out to movies and dinners and bill them as “group therapy,” per the NYPost.
Both Youngs were arrested last week and were charged with healthcare fraud and violating an anti-kickback statute.
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